The limbic system functions to control emotional and behavioral activities and is required for normal learning and memory. It has become increasingly clear the developmental defects affecting limbic structures, may underlie many neuropsychiatric disorders (Weinberger, 1996). The long-term goal of this research is to identify genes that specifically alter the development of areas in the brain that are essential for emotion and cognition. We have shown by gene targeting that the absence of the forebrain restricted transcription factor, tailless (tlx), leads to anatomical alterations in the forebrain, including a reduction of a subpopulation of GABAergic interneurons, reduced entorhinal cortex and associated structures of the temporal lobes. Mice with a mutation in the tlx gene function relatively normally, but display cognitive and aggressive behavioural abnormalities (Monaghan et al., 1997). The cellular and molecular mechanisms by which tlx regulates formation of the forebrain are unknown. Preliminary data suggest that tlx operates by regulating normal cellular proliferation and the timing of neurogenic events in the prosencephalic ventricular zone. This proposal seeks to test this hypothesis through a detailed analysis of the role of tlx in forebrain development. We will define the consequences of loss of tlx on milestone developmental events, including cell proliferation, differentiation, and survival. We will distinguish the consequences of loss-of-tlx in the ventricular zone from those in the subventricular by performing region- restricted loss of function experiments with the tlx gene using the Cre/loxP system. Together, these studies will define the role of the tlx gene in progenitor cellproliferation/determination and facilitate our understanding of the neurodevelopmental basis for neuropsychiatric disorders.